What Should Students Pay For a University Education?

If you ask many of the student union groups, or left-wing think tanks across the country (in fact across the Western World) they will tell you that in an ‘advanced’ country like Canada, post-secondary education should be equally available to everyone. This usually means making it free. Many people draw parallels with the Canadian Healthcare system from the viewpoint that the right to education should be just as basic as the right to see a doctor. To their credit there are some modern precedents for their vision of a free-education system in some of Europe’s Scandinavian countries (although they still charge extremely rates for international students). In my humble opinion I think the current balance we strike here in Canada between government subsidies and personal tuition fees is a pretty good system. To quote a classic cliché, “We should give a hand-up, not a hand-out.”

I think the basic education is an inalienable right. The government should have the responsibility to teach a person how to read and write, how to function in a democratic society, and how to use basic mathematics. If people want higher levels of primary and secondary schooling I think the private option is a good one, as long as those people pay their basic school taxes in addition to their private school tuition (just like they do now).

Where Is the Funding For Our Tuition Costs?

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I do not believe however, that post-secondary training should be fully paid for by the government. In fact, I think one option that trades people have shown us the potential of is having employers fund educations in return for loyalty guarantees. This makes sense on a lot of levels, but that is another argument for another day. I believe the government has a great interest in supporting people’s educational pursuits, but that we should also learn to become personally responsible for our own education to some degree. The thing that can sometimes rattle me about certain student groups is their ability to ‘waste’ extreme amounts of time whining, crying, picketing and complaining, yet they can’t be bothered to vote in any numbers during elections. If we could channel all that energy spent complaining, imagine the jobs students could create for themselves? That sort of independent, entrepreneurial spirit is the real solution to financial problems, not government handouts.

If you believe (as I do) that students should bear some of the financial weight for their education then the question becomes just how much each individual should pay and how much the government should contribute. According to a 2008 study done at educationalpolicy.org post-secondary funding in Canada was roughly 1.4% of GDP. That is quite a bit higher that the OECD (Organization for Economic Co-operation and Development) average of 1.1%. It is also considerably higher than the USA and UK, and almost on par with the highly subsidized education model in the Scandinavian countries.

There was quite a range in the data I was able to track down on just how much the average yearly tuition was Canada-wide in 2010. Most numbers were just under $5,000 flat. After an absolutely scintillating 20 minutes of my life (that I will never get back) that I spent looking through the University of Manitoba’s financial report from last year, I found out that tuition fees accounted for 22% of total revenue. Even if you chalk up another 2-3% in ancillary and user fees, that’s still only 25% of what your education truly costs, and that’s not even totally factoring in one-time capital expenses like large infrastructure projects. This is in line with the majority of Canada’s major universities where tuition fees make up 20-30% of revenues. Advocates of tuition freezes like to point out that provincial funding has decreased substantially over the years, but this slack has mostly been made up for in different Federal subsidies, and there are more scholarship, grants and bursaries out there than ever before.

I realize that many professional graduate faculties such as Law, Medicine, Dentistry, Engineering, Architecture etc, have much higher tuition fees than this average; however, it is equally important to point out that their expected lifetime earnings are more than enough to offset this difference. It should also be taken into consideration that at most universities Arts students and other low-cost faculties actually see substantial amounts of their tuition dollars go to subsidize the professional faculties to keep their tuition costs down. So then to quantify our original question, is $5,000 a year, or 25% of the total tuition costs of our education a reasonable amount to expect a student to pay? I think it is perfectly reasonable. In fact 25-30% seems like a nice benchmark. If we could somehow tie university tuition rates to the general inflation rate and keep this number consistent I think this would be the ideal situation (as opposed to tripling tuition overnight like we seen in England). Parents could even predict with remarkable accuracy exactly how much money their child would need to attend school. Considering everything we gain from a university (or college) education, and the increased earning rates we are looking at for the rest of our lives, I see no reason why we shouldn’t pay for a quarter of what it costs to attain it.

Tuition Costs Are Largely Paid For By International Students

For international students out there who complain about paying more I am sorry, you may want to read another of our articles because you won’t get much sympathy from me. The facts are that at many places, including the U of M, international students can expect to pay about 2.5-3.5 times what Canadians do. Considering that my parents have contributed to the post-secondary tax system for about 30 years before my brother or I got there, and they will now contribute until they retire, I think that international students are getting a pretty sweet deal! The same principle now applies to my life where I will work and pay the taxes that subsidize university education, while many of the foreign students that I graduated with will move back to their home country with a 1st class education. I have heard 101 arguments against these simple facts, but none yet that stand up to the simple premise I put forward. If my logic still is not enough for you, consider the principle of the free market at work here. If the tuition rates are so high and put so much strain on international students why is it still so popular to come to Canada to study? Plainly, the tuition costs cannot be that bad. Note: I want to make it clear that I am well aware that having foreign students on campus is a boon to the student population. The diversity and range of human experiences they bring to a campus enriches everyone. Without sounding incredibly cliché I made several good friends who were international students when living in residence (although we usually didn’t see eye-to-eye on this issue). I simply believe that in a purely economic sense (cents?) it definitely makes sense why international students should pay more (when you start looking at lifetime tax dollars, 3x tuition is actually an unbelievable deal) than a local student.

I realize that I am poking at a potential bees nest in terms of inflaming opinions with some of the views expressed here. All I ask is that you consider all of the potential responses before launching a salvo back at me. Maybe I am missing some key consideration in my thinking here as I have definitely been wrong before! Let the debate begin…